US Federal Reserve maintains target range for federal funds rate

The Federal Reserve's stance underscores its commitment to its dual mandate of achieving maximum employment and maintaining inflation at a stable rate of 2 per cent over the long term. While there has been a moderation in job gains since early last year, the labour market continues to exhibit resilience, and the unemployment rate remains low. Inflation, while easing slightly over the past year, still remains elevated.

The Fed has expressed its intention to carefully evaluate incoming data, the evolving economic outlook, and the balance of risks when considering any potential adjustments to the federal funds rate. It has made it clear that it does not anticipate reducing the target range until it gains greater confidence that inflation is moving sustainably towards the 2 per cent objective, the Fed said in a statement.

Furthermore, the Fed remains committed to reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as previously outlined in its plans. This reaffirms the central bank's dedication to achieving its 2 per cent inflation objective.

Recognising the uncertainty in the economic outlook, the Federal Reserve is maintaining a vigilant approach to inflation risks. The central bank stands ready to adjust its monetary policy stance as deemed appropriate if any risks emerge that could hinder the attainment of its employment and inflation goals. The Federal Reserve's assessments will consider a wide range of economic factors, including labour market conditions, inflation pressures, inflation expectations, as well as financial and international developments.

ALCHEMPro News Desk (KD)